Key service levels agreements (SLAs) for network availability and resilience appear to have been reduced as part of the negotiations on the UK’s new £1 billion Emergency Services Network (ESN), it emerged last week following a preliminary hearing in the UK Technology and Construction Court (8-9 December 2015).
Airwave, the incumbent emergency services communications provider, is suing the Home Office (HO) over the way the Lot 3 ESN Mobile Services contract procurement procedure was conducted, asserting that the HO did not treat it and other bidders in a fair, open and transparent manner. Lot 3 was won by UK mobile network operator EE.
No one disputes that the Government is entitled to makes changes to the contract and procure whatever kind of network it wants. The argument here is that there were several occasions where the Government might have paused and made other bidders aware that it was making changes to the procurement process and allowing wholesale changes to mandatory items – see below for more on the latter.
Airwave’s believes that these wholesale changes centred on the amount of risk the Lot 3 provider has to take on, which would have made the contract much easier to bid for if the other bidders had been given the same opportunity to negotiate as EE was.
The Court Case – automatic suspension of procurement process
Airwave is seeking damages against the Home Office, claiming: ‘We do not believe that bidders, including Airwave, were given equal treatment under relevant procurement laws and we have therefore made a claim in order to protect our position for any loss suffered.’
Under EU procurement rules, if an award is challenged then the procurement process is automatically halted. However, just ahead of the Court hearing last week, Airwave dropped its opposition to the automatic suspension of the process, allowing the awards procedure to continue. As a result of this, contracts were signed with EE for Lot 3 and Motorola Solutions for Lot 2 User Services on 10 December 2015. The Lot 1 Delivery Partner contract has already been awarded to KBR.
In response to Airwave’s court challenge, the Home Office issued a cross undertaking meaning that Airwave was liable for all damages to the programme caused by any hold up to the procurement process. In a sworn statement, the HO apparently argued that delays to the programme would cost it £7m a week.
However, Wireless understands that the figure was based on the projected total cost of procuring ESN and was based on various assumptions, such as Airwave continuing to charge at its current rates for extensions to contract, despite Airwave being on record in the past as willing to offer discounts to extensions.
The £7m figure also included projected costs of other contracts that have not gone out to tender yet, such as ground to air network, devices, vehicle installations, training and so on. It is also dependent on the price of a future ESN Lot 3 procurement, which is impossible to predict pricing for. The HO would simply expect a lower price for Lot 3 when it is re-tendered in 5 or 6 years time.
The judge apparently dismissed the £7m figure as he considered it did not stand up to scrutiny being predicated on too many unknowns. Nonetheless, Airwave did not oppose lifting the suspension to the contract process. The assumption being that the Government has access to a lot more financial resource to fight lawsuits than Airwave does.
The Court Case – basis of the Airwave challenge
The basis of Airwave’s challenge concerns the way in which the HO conducted the Lot 3 procurement process. Initial bids from the five shortlistees for Lot 3 - Airwave, EE, Telefonica UK (O2), UK Broadband Networks and Vodafone - were assessed using a points system based on technical, commercial, service and price aspects to determine the most economically advantageous tender.
EE scored poorly on the technical aspects, (although it was within the specifications and required performance criteria) but made up for this by having a very low price. Airwave scored highly on the technical and service aspects, but was more expensive than EE and came third.
The score does not relate to an assessment of the technology itself, but on how well the assessor thinks the bidder understands the contract requirements. The PQQ stage was open to anyone who could deliver the technical solution. The ITT stage narrowed bids down to those who could deliver it at a reasonable price – although there was no figure to price at that point.
After assessing the ITT submissions, the HO eliminated Airwave, Vodafone and UK Broadband in February 2015. Only EE and Telefonica UK (O2) were invited to proceed to the Best and Final Offer (BAFO) stage.
It is not clear why the Home Office decided to only take two bidders through to the BAFO stage on Lot 3 - a contract where arguably it would want to maintain as much choice as possible for as long as possible in the interests of competition and to get best value for the UK taxpayer. Three bidders are considered quite usual for this kind of contract at BAFO stage.
In fact, the HO allowed no less than four firms to submit BAFOs for the Lot 1 Delivery Partner contract. It had no choice at all on the Lot 2 User Services contract, as HP and Motorola Solutions were the only firms prepared to submit even initial bids.
One reason the HO may have only taken two bidders to BAFO is that Lot 3 is extremely complicated and attempting to properly assess more than two bids would have been very time consuming and expensive. By comparison, Lot 1 is a relatively simple contract to assess.
The original ITT bid terms set out by the HO state that there would be ‘limited or no negotiation on mandatory items’ – but Telefonica and EE were allowed to negotiate over mandatory items from this stage onwards.
One view as to why this happened, indeed was necessary it is argued, is that the original ITT specifications were designed to be technology agnostic, but at that point had similar SLAs and performance and QoS monitoring criteria to how the current Airwave TETRA network is run and services levels are measured. The assumption was that these specifications would always need to be changed to make it specific to 4G LTE technology.
The argument goes that the way a 4,000 site TETRA network with one dedicated user community is managed is very different to how an operator needs to manage an 18-22,000 site 4G network used by millions of consumer subscribers as well. In short, at this point, the technical solutions and requisite SLA measurement had to be tailored to a very different technology. The assertion is that at least some of the SLAs required for TETRA are not necessary for this kind of 4G LTE network.
However, the competition then went somewhat awry when Telefonica pulled out of the bidding in June ahead of submitting a BAFO, leaving EE as the only remaining bidder. Perhaps unsurprisingly, EE allegedly then put its price up.
It could be argued that the sensible thing to do at this stage would have been to bring one or more bidders back into the frame to ensure the Government and the taxpayer got good value for money. Others insist this would have been expensive and cause further delays, and that perhaps the Home Office had gathered enough information from the negotiations with Telefonica and EE by this stage to feel it could safely continue with one bidder.
But if the Government wants to proceed with only one bidder it must still show it is getting value for money. It does this by creating a ‘virtual bidder’ using a ‘should cost model’, which is what the HO opted to do. PA Consulting spent a lot of time and effort pulling together this model as to what ESN ‘should cost’. EE’s bid failed to meet that cost model price.
Some argue that the HO should have paused for reflection about how the procurement should then proceed – or even if it should do so at all – or perhaps bring back another bidder. However, the HO decided to sit down with EE and work out a way to get its price close to the ‘should cost model’ price, so that it would provide value for money.
Again, it is argued that some aspects of the current Airwave model were deemed unnecessary on a 4G network, and by removing them the price could be significantly reduced.
However, the crux of Airwave’s objections is that if it and other bidders had been given the same opportunity to negotiate they too could have reduced their prices. Hence, its claim that the other bidders were not treated fairly, as no other bidder was given the chance to make changes to the major items affecting the cost.
Perhaps surprisingly, at the preliminary hearing it appeared that the Government’s defence rested on the need to award contract quickly, rather than on defending the legality of the process it ran.
How and where service levels may have been reduced on ESN
As mentioned, the Government is entitled to procure whatever kind of communications network it chooses. However, in its negotiations with EE the HO has lowered some of the current mission critical specifications for ESN. This despite its much reiterated claim that ESN would be as good as, if not better than the Airwave service.
But as stated earlier, the counter argument is that some of the specifications are not necessary or even appropriate to the way a 4G network is operated and managed, and therefore, ESN will be ‘as good as’ the current network.
One detail to emerge concerns availability of the network. The HO has removed the need to measure EE for the availability of the network for hand held devices both in and out of buildings – two critical key performance indicators (KPIs). EE will not be measured on its ability to provide this in the way Airwave currently is.
Given that 80% of the 300,000 current Airwave users have hand held devices – this is perhaps startling. Also, there will be no need to measure availability on a per site basis anymore and this will now be measured as an average across the country. However, EE has stated elsewhere that its network provides 98% coverage in-building at 99.74% availability.
Removing the handheld availability service level agreement (SLA) was one of the reasons EE was able to drastically reduce the number of base stations in its site plan and therefore significantly reduce its price. Again, the argument goes that other bidders could have done the same if they’d been given the same opportunity.
Resilience – autonomous power back up
Mission critical networks need to be protected against loss of power. The Fire Service asked Airwave to put in power autonomy half way through the contract roll-out in 2007. Every Airwave site has power back for 30 hours, while one third of them have back-up power for seven days.
This mandatory requirement has been removed from Lot 3. EE is not obligated to provide 7-day back-up power availability and is only obliged to provide 30 hours of power back up for 1 in 5 base stations.
Resilience – fault repairs
All sites have to be fixed within 4 hours at the moment, but in the future only a small number of pre-determined ESN sites will be treated in this way, the rest will be fixed on a ‘best endeavours’ basis of six hours. In addition, an operational commander cannot change a site’s priority status for repairs; i.e. if it is not one of the pre-determined priority fix sites, the commander cannot request to change the status of the site to get a priority fix.
The counter argument to this is that 4G is a fundamentally different technology to TETRA using a different network architecture and site grid approach. 4G sites are designed to overlap and do not provide unique coverage. If a base station goes down in London, for example, it will be covered by other base stations, as more sites are deployed than are strictly necessary for coverage reasons, but are added to provide extra capacity.
In rural areas there may not be as much overlapping coverage, so some of these sites are the ones that will have back-up power and faster fault repair SLAs closer to the existing Airwave model.
Wireless understands that the required geographic extent of the Lot 3 coverage has not been altered during the negotiations with EE. In addition, the obligation to provide coverage in the London Underground (and Crossrail) was not in the original scope of Lot 3.
An HO spokesperson told Wireless last week that the Government is working with Transport for London and Crossrail on coverage solutions for the Underground and is committed to providing coverage that is as good as, or better, than the coverage provided by the Airwave TETRA radio system.
The HO still has to find a solution for the ground to air network. This is a separate contract outside of the Lot 3 remit.
Rural and remote coverage
ESN originally had a Lot 4 Extension Services contract to provide coverage in rural and remote areas where it has not been commercially viable for the UK mobile operators to provide network infrastructure. Lot 4 was deemed commercially unattractive and only Arqiva was prepared to submit a bid. The HO cancelled Lot 4 in January 2015, claiming it could be done by the Lot 3 provider.
However, the Government has been forced to revive a version of Lot 4 as EE will not be building its own infrastructure in these rural areas. In August, the Government issued a notice and consultation proceedings on how best to provide coverage to some remote and rural areas in the UK. This is referred to as the Extended Area Services (EAS) contract.
As regards EAS, Richard Hewlett, Deputy Programme Director, Home Office told the audience at the British APCO Autumn Event in Newcastle attended by Wireless on 4 November 2015 that: ‘We will be building passive infrastructure. We will acquire and design and build sites in these areas; there are around 40 of them (areas). The Lot 3 winner (EE) will provide the base station equipment – the eNodeBs, etc and slot them in.’
Hewlett said the extended coverage areas include: Central Wales, The Pennines, Yorkshire, the Lake District and West Scotland. An EE spokesman confirmed: ‘With regards to coverage, yes, we’re massively expanding our network and the EAS will cover the extra parts, where we’ll provide a service.’
Given the difficulty of negotiating planning permission for sites in many of these areas, it will be interesting to see whether coverage in the EAS areas will be ready by the time the main network goes live.
Parliamentary question on ESN coverage
Pertinent to the EAS is a question asked on 1 December by Chris Evans Labour/Co-operative MP for Islwyn in Wales of the Secretary of State for the Home Department. Evans asked: ‘Which parliamentary constituencies do not fall entirely within the 90% coverage of the 4G replacement system being considered as sole bidder for Emergency Services as part of the Emergency Services Mobile Communications Programme.’
Mike Penning, Minister of State for Policing and for Justice, replied: ‘The Emergency Services Mobile Communications Programme (ESMCP) will provide geographic coverage to 97% of the country (including the 90% required by the Regulator) by requiring the Mobile Services supplier to infill commercial coverage area and extend their network over sites provided by ESMCP’s Extended Area Services (EAS) project.’
Penning listed 57 Parliamentary Constituencies that do not fall entirely within the 90% coverage (as required by the Regulator), and those that do not fall entirely within the 97% coverage (with a further 7% provided by ESN): see full list here.
Addressing key mission critical functionality issues
One of the main concerns of the emergency services has been to ensure that the key functionalities provided by the current TETRA two-way radio system are replicated on the new 4G LTE service – particularly voice applications. These include prioritisation, pre-emption, direct mode, group calling and so on.
Prioritisation is a form of queuing in which certain users can be prioritised over others when necessary. It exists within the existing LTE standard but is rarely if ever used in commercial mobile networks. How it works is that, for example, a police gold commander’s call will have priority access to the network over any other users. Under ESN, emergency services personnel should have priority over EE consumer subscribers.
An EE spokesperson confirmed to Wireless that: ‘On priority, I can absolutely confirm that the requirement to be able to prioritise emergency services as and when needed is built into the contract, and is a part of the standards for LTE development.’
A Home Office spokesperson added that prioritisation was a key requirement of the contract and that emergency services personnel would have priority over other users.
Pre-emption is a more controversial application, which enables the network operator to throw people off the network (off a particularly overloaded base station) if it is so crowded priority calls cannot even access the network.
The police want something they call ‘ruthless pre-emption’, whereby the network operator actively seeks the priority calls trying to access the network and kicks non-priority calls off the network to enable them to get on.
The EE spokesperson said: ‘We can do it [pre-emption], and it’s essential that we build in the capability to do it, but it’s not a blanket “consumers off, emergency services on” situation – it’s just about making sure that there’s sufficient space, and the priority will go to the emergency services.
‘This is where our spectrum holdings become important. Every site in our c.19,000 grid will run 20MHz of spectrum dedicated to 4G. In urban areas, that’ll increase to 40MHz. And we’ll have c.3,500 base stations running 1,800MHz and 800MHz, so 25MHz in total.’
Wireless understands EE is building a core network and separate PLMN (public land mobile network) for ESN, so emergency services users are kept separate from EE’s consumer subscribers, although the same spectrum and backhaul is common to both.
This means the emergency service users can be seen and managed anyway – there is no need to actively seek them out to prioritise their calls or data transmissions. This is prioritisation and pre-emption, but delivered in a different way to how it is done on the TETRA network.
At the British APCO event, Richard Hewlett was emphatic that pre-emption would be available: ‘We will also have prioritisation and pre-emption; the mobile network operators have guaranteed this. We can kick people off the network, which I suspect won’t happen.’
Wireless contacted the Home Office, but it declined to comment on any of the above.
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